'Lack of policy and timeline clarity problem for India'

Daniel Yergin, vice-chairman of oil and gas consultancy firm IHS, was speaking at Petrotech 2014

Pulitzer prize winner and vice-chairman of oil and gas consultancy firm IHS, Daniel Yergin today said the major issues that were causing concerns for the Indian hydrocarbon industry are pricing, issues related to timelines and lack of clarity on subsidy front.

Interacting with the media on the sidelines of Petrotech 2014, the author of The Quest: Energy, Security, and the Remaking of the Modern World said, “In order to improve the sector, India has to do three things. One related to gas pricing, towards which the country has already initiated steps. There also needs to be a clarity on timelines and predictability on decision making. Moreover, subsidy programme should be more focused based on the needs only.”

The ministry of petroleum and natural gas had notified a new domestic natural gas pricing last week, which is likely to be around $7-8 per million metric British thermal unit. “Fifteen years ago, it was unimaginable that Indian gas price could be linked to the US prices. India has done the right thing because a hike in gas price through a formula removes the arbitrary nature of price fixing and sends a very important message to investors across the world,” he added.

The industry veteran added that the future of the industry would be driven by growing demands in emerging markets like India and China; the developments in unconventional sector like shale gas and also a rebalancing in the flow of oil and gas in the world.

When asked about the shale gas prospects in India, he said, “Shale gas exploration in India is just the beginning. Whether it will be successful and viable can only be said through actual production experience. Even in the US, people didn’t know that shale would be so huge unless drilling was done.